Jackson City Council deeds Biddle Street property to nonprofit for $1, renovations set to begin in May

The Community Action Agency recently purchased this home at 606 W. Biddle St. for $1 from the City of Jackson. The agency plans to renovate it for a low-income family. (Mike Mulholland | MLive.com)

JACKSON, MI – Community Action Agency officials will soon begin renovations to a Jackson home located at 606 W. Biddle St. after the Jackson City Council voted unanimously Tuesday to deed the city-owned property to the nonprofit for $1.

On Jan. 8, Council members approved the federally-funded purchase of the property for $2,500.

The city used HOME Investment Partnerships Program funds, which are annually allocated from the U.S. Department of Housing and Urban Development to provide housing to low-income residents.

Under HUD guidelines, the city is required to spend at least 15 percent of their annual HOME allocation on projects sponsored or owned by nonprofits such as CAA — dubbed "Community Housing Development Organizations."

"Because Jackson receives a very small amount of HOME funds annually, we have preferred to work with one Community Housing Development Organization," Jackson Community Development Project Coordinator Michelle Pultz-Orthaus said. "CAA has been serving as the city's CHDO since July 1, 2011."

Community Action Agency CEO Toby Berry said the nonprofit has looked for projects to complete using HOME funds for nearly two years.

"We have not done a project yet for a number of reasons," she said. "I was CAA's community development director for five years and was in January named CEO. We haven't yet filled my old position and I've been responsible for both."

According to a memo issued by Jackson City Manager Patrick Burtch, CAA had identified potential projects during the past year, but either the properties were sold to another entity or were not viable for CAA to take on.

According to city officials, CAA has until June 30 to commit to a project using HOME funds or it risked losing the 2011-12 allocation set forth by HUD and the city.

"There is a 24-month commitment deadline HUD enforces," Pultz-Orthaus said. "CAA's first start date was July 1, 2011, so they had until June 30 to commit funds to a project. For their 2012-13 allocation, they have until June 30, 2014."

Pultz-Orthaus said CAA is allowed to spend funds from two grant years, giving CAA officials $93,250 to work with on the project.

CAA was awarded $53,250 in 2011-12 and $40,000 in 2012-13, which accounts for 16.5 and 15.2 percent of HOME funds, respectively.

City officials estimate the nonprofit will be awarded $40,000 July 1 for their 2013-14 allocation, but Pultz-Orthaus said HUD has not yet put forth their grant amounts for the 2013-14 fiscal year.

Berry said it's too early to say how much the renovations to the home will cost.

"We'll work closely with the city to bring the house to code and renovate it for a low-income family," she said. "We expect to begin sometime toward the end of May."

Pultz-Orthaus said city officials estimate the renovations will cost $75,000 after a "cursory review" of the property by city inspectors.

"A detailed list of the specifications and cost estimate has not yet been written up," she said.

Once completed, the house can be sold to a person or family that does not exceed annual income limits, put forward annually by HUD.

Under HUD guidelines, the most a single person can make annually and still be eligible to buy the house is $32,850. For a family of five, the annual household income cannot exceed $50,700.

Contact Will Forgrave at wforgrav@mlive.com or 517-262-7554. Follow him on Twitter at @WillForgrave.